Why Vestas Wind Systems A/S (CPH:VWS) Could Be Worth Watching

Today we're going to take a look at the well-established Vestas Wind Systems A/S (CPH:VWS). The company's stock received a lot of attention from a substantial price movement on the CPSE over the last few months, increasing to kr.235 at one point, and dropping to the lows of kr.161. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Vestas Wind Systems' current trading price of kr.173 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Vestas Wind Systems’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Vestas Wind Systems

Is Vestas Wind Systems still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% below my intrinsic value, which means if you buy Vestas Wind Systems today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth DKK207.23, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Vestas Wind Systems has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Vestas Wind Systems look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In the upcoming year, Vestas Wind Systems' earnings are expected to increase by 34%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in VWS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on VWS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for Vestas Wind Systems you should be aware of.

If you are no longer interested in Vestas Wind Systems, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.